For companies that make ethanol for fuel, these may be the worst of times. But another ethanol-based product — hand sanitizer — is booming.
Spurred by the spread of the new coronavirus, hand sanitizer is in such demand that the Corn Refiners Association, a trade group, reassured the public yesterday that its members are keeping pace providing a key ingredient, while urging consumers not to hoard the product.
“America’s corn refiners are producing trainloads of industrial alcohol on a daily basis,” said the CRA’s president and CEO, John Bode. “There has been no shortfall in meeting alcohol orders for production of hand sanitizers or other health-related sanitizing products. The distribution system is quickly catching up with the surge in demand for these products.”
Corn-based ethanol is a common ingredient in sanitizers. It’s produced by converting cornstarch to glucose and combining it with yeast. Toiletries and cosmetics, including sanitizer, account for almost a quarter of U.S. end markets for industrial alcohol, according to the CRA.
Corn-based ingredients also account for a quarter of hand soap’s ingredients, according to the Corn Refiners, representing companies such as Archer Daniels Midland, Cargill and Grain Processing Corp.
With consumers clamoring for sanitizer, ethanol producers might seem inclined to wash their hands of fuel — which is struggling from the economic hit to transportation, as well as some federal renewable fuel policies — and turn to toiletries.
But that’s not a simple transition, said Chad Friese, general manager of Chippewa Valley Ethanol Co. in Benson, Minn.
Regulatory hurdles face companies that want to make that transition, Friese said, the biggest being quality-related. Ethanol that’s eventually used on products that touch the skin needs to be of higher quality than the type that goes into gas tanks, he told reporters yesterday on a coronavirus-related conference call with the Renewable Fuels Association.
That may be a shame for biofuel companies, which were already having a hard time before the virus hit. Friese and other RFA members said they expect facilities to lay off workers and close either partially or fully, at least temporarily. They’ve asked EPA to stop exempting small refineries from biofuel-blending requirements for the time being.
For the corn refiners, the crisis also points to the critical nature of agricultural commodities during such emergencies. The CRA welcomed news yesterday that the Trump administration deemed food and agriculture among the “critical infrastructure industries” in which employees must maintain a normal work schedule.
Unlike companies that put ethanol into fuel, the non-fuel-related ethanol business is relatively small and stable, said Friese, whose company devotes about 15% or 20% of its production to the industrial alcohol market — such as cleaners, vaccines, hand sanitizer and alcoholic beverages.
For those driven to drink by the crisis, there may be a hint of bad news, though: Some companies that make alcohol for beverages are reading the market and switching over to sanitizer, Friese said. “You may see less vodka but more hand sanitizer.”